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Brazil - Rio de Janeiro

The Brazilian Securities Commission (CVM) issued, on December 22, 2021, CVM Resolution No. 59 (RCVM 59), which amends CVM Rule No. 480 (CVM Rule 480). This new normative arises from Public Consultation No. 09, closed in March 2021, and brings substantial innovations on the informational regime for issuers of securities. Indeed, the reform promotes a reduction in the cost of compliance for issuers and greater accessibility of information to investors by eliminating redundancies and simplifying the content required in the Reference Form, the main document of publicly-held companies in Brazil.

However, most importantly, through RCVM 59, CVM in an unprecedented way establishes criteria and requirements for the disclosure of information on environmental, social and governance aspects, which was previously a mere deliberation of issuers to attract investors engaged in ESG aspects, and it was not foreseen in any regulation of the autarchy.Continue Reading Brazilian Securities Commission Establishes ESG Information Disclosure Criteria for Listed Companies

Governance

The European Commission has indefinitely postponed its much-anticipated directive on human rights and environmental due diligence (HREDD) – more than 150 days after it was first expected to be published. While the reason for the delay is unclear, 47 civil society organisations have penned an open letter seeking “full transparency on the reasons for the delay and on the decision-making process going forwards.”

Despite this setback, national HREDD legislation continues afoot: laws have been adopted or are in force in France, Germany and Norway, while proposed national legislation is being progressed in a number of other European countries. Most recently, in December 2021, the Netherlands announced its intent to introduce its own national HREDD law in view of the further delay of the proposed EU law.

Legislative developments aside, investors, civil society and other stakeholders are scrutinising how companies identify and mitigate human rights impacts in their operations and supply chains more closely than ever.

And so the message is clear: companies still need to take steps to develop and reinforce their human rights due diligence programmes, both in anticipation of further mandatory HREDD laws and to respond to stakeholder expectations and demands.Continue Reading Business and Human Rights – EU’s Proposed Mandatory Human Rights and Environmental Due Diligence Law Faces Further Delay

Products

On December 16, 2021, the US Office of the Comptroller of the Currency (OCC) released draft principles for managing exposures to climate-related financial risks (Climate Principles). The OCC regulates national banks, federal savings associations, and federal branches and agencies of foreign banking organizations.

The Climate Principles are targeted at banks with…

Singapore

On December 15, 2021, the Singapore Exchange (SGX) responded to two consultations addressing a range of ESG-related topics that could significantly change the ESG reporting landscape for listed companies in Singapore. The consultations address the implementation of (i) mandatory climate-related disclosures for certain sectors aligned with the Recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), (ii) mandatory diversity-related disclosures for all issuers and (iii) a list of 27 “Core ESG Metrics” to help listed companies align their ESG disclosures with international standards and best practices on a voluntary basis.

As SGX otherwise requires ESG reporting on a comply-or-explain basis only, these proposals represent a shift toward an increased focus on mandatory climate and diversity disclosures that, in particular, has taken hold among Asian regulators. Just this month, the Stock Exchange of Hong Kong implemented mandatory gender diversity requirements and Hong Kong’s Cross-Agency Steering Group reported “progress towards mandating climate-related disclosures aligned with the TCFD framework by 2025 across relevant sectors”, while a group of Malaysian regulators announced their intention to implement mandatory TCFD disclosures by the end of 2024.

In this Blog Post, we highlight key aspects of the recent SGX announcements and provide guidance on how companies are already implementing ESG frameworks incorporating TCFD and more.Continue Reading Singapore Regulator Prioritizes TCFD, Diversity and ESG Metrics in New Disclosure Rules and Guidance

China - Hong Kong

“Delivering effective corporate governance practices and ESG measures is more than a box-ticking exercise. The change needs to begin with a shift of mindset at the top of the organisations.” – SEHK, December 2021

On December 10, 2021, the Stock Exchange of Hong Kong Limited (SEHK) published the conclusions from its April 2021 consultation on amendments to the SEHK’s Corporate Governance Code (the Code) and Listing Rules intended to promote good corporate governance practices among listed companies and IPO applicants. The final amendments address a range of topics that could significantly change the way that the boards of covered entities operate, including with respect to gender diversity, ESG reporting timelines and the role that ESG plays in corporate governance structures and processes.

In this Blog Post, we highlight final amendments to the Code and the Listing Rules addressing the link between ESG and good corporate governance, ESG reporting and gender diversity at both the board and workforce levels.Continue Reading ESG and Gender Diversity Requirements Finalized for Listed Companies and IPO Applicants in Hong Kong

Asset Management

On November 23, 2021, the International Organization of Securities Commissions (IOSCO) issued its “Environmental, Social and Governance (ESG) Ratings and Data Providers” final report in which IOSCO makes 10 recommendations related to the use of ESG ratings and data products in financial markets. In a new Legal Update, we discuss the report and…

China - Hong Kong

On November 26, 2021, Hong Kong’s Mandatory Provident Fund Schemes Authority (MPFA) advanced the Special Administrative Region’s sustainable finance strategy with new Principles for Adopting Sustainable Investing in the Investment and Risk Management Processes of MPF Funds (the Principles). The Principles lay out a high-level ESG integration framework for trustees of Mandatory Provident Funds (MPF), the investment vehicles for the Hong Kong’s mandatory retirement protection scheme, across four key elements: governance, strategy, risk management and disclosure.

In this Blog Post, we provide a brief overview of the Principles and highlight each element, as well as important next steps for MPF trustees. We also provide guidance on how companies are already implementing ESG frameworks similar to the Principles.Continue Reading Hong Kong Regulator Issues Sustainable Investing Principles for Pension Fund Trustees

Sunrise on a lake

On November 10, 2021, the Association of Southeast Asian Nations (ASEAN) released Version 1 of the ASEAN Taxonomy for Sustainable Finance (the “ASEAN Taxonomy“). First announced in March 2021, the ASEAN Taxonomy will provide a common language for sustainable finance among the ten ASEAN Member States (AMS) that, together, comprise the fifth largest economy in the world. This is a necessary and timely development as ASEAN remains highly vulnerable to climate change, which has had a significant impact on the people, businesses and governments of ASEAN.

Version 1 is a significant step in ASEAN’s sustainability journey, as this initial document will provide the framework for continuing discussions among AMS as the ASEAN Taxonomy develops. In this Blog Post, we highlight key aspects of Version 1 of the ASEAN Taxonomy and compare this new framework against the world’s most prominent sustainability taxonomy, the EU’s Taxonomy Regulation (the “EU Taxonomy“).Continue Reading ASEAN Releases Sustainability Taxonomy for Southeast Asia

Products

On November 8, 2021, the acting head of the Office of the Comptroller of the Currency (OCC), Michael J. Hsu, issued a call to action on climate change to the boards of directors of OCC-regulated banks. Specifically, he outlined an initial series of climate change-related questions that boards should be asking bank management…

Wind farm and nuclear power plant

This blog was first published by Law.com

As usual, things ran over, but eventually the parties meeting under the United Nations Framework Convention on Climate Change and, separately but together (kind of), under the Paris Agreement, adopted two “Decisions” by consensus, being CP.26 and CMA.3 respectively.

Continue reading at Law.com.